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Glossary
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Bridge loan

What is a bridge loan?

A bridge loan is a type of short-term loan intended to "bridge" the gap between short-term cash requirements and long-term financing. These loans are commonly used in real estate transactions and by startups awaiting closing on their next round of funding.

A bridge loan provides immediate cash flow and is typically paid back within a year. For startups, a bridge loan can provide funds to keep the company operational between funding rounds. For real estate, it can allow someone to buy a new property before selling their existing home. However, bridge loans often have higher interest rates and fees compared to more conventional forms of financing.

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